Either in conjunction with our corporate practice or with our client's preferred mergers and acquisitions (M&A) counsel, Crowell & Moring has extensive experience assisting companies that seek to acquire or sell business units that are government contractors. Having knowledge across the whole range of government contract issues, we are well suited to evaluate the target company's government business in the due diligence process and identify non-obvious (but very real) areas of risk.
For example, our due diligence review found problems with the integrity of the time-charging system or pricing practices when a target company boasted that it had never overrun a contract in 25 years. We also identified a $1 million solution that saved the divesting company from a $60 million government claim for surplus pension assets.
Focus on Foreign Investments
When the acquiring company is owned or controlled by foreign interests, we assist clients in myriad reporting and approval requirements — such as approval by the Committee on Foreign Investment in the United States (CFIUS) under by the Exon-Florio Act — that affect foreign investment in the United States.
For example, we assisted a Dutch company in obtaining U.S. government approvals to acquire the last U.S. producer of key satellite component, including obtaining CFIUS clearance and negotiating a special security agreement that allowed continuance of necessary facility security clearances. We also assisted a domestic investment partnership with majority participation by a French insurance company to structure its purchase of a sensitive U.S. defense contractor to permit continuation of a facility security clearance.
Our Depth of Experience
The size of our government contracts practice area permits rapid deployment of experienced lawyers across the country to meet almost any closing schedule. For example, in 1999, on behalf of a major British aerospace client, we fielded a team that was based at three different locations and worked coast to coast to review documents, interview key personnel, and prepare written due diligence reports, all in less than two weeks.